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The Return of Mandatory Bundles: Good News?

DATE: 11/20/2018

We at DataGen were excited to hear last week’s news about the new mandatory oncology bundle that will focus on cancer patients undergoing radiation treatment. Though we’re waiting on CMS to release more information about its rulemaking, the Department of Health and Human Services’ (HHS) 2017 report to Congress contains some telling information that helps us make educated predictions about how the program may work.

Prediction #1: It will run concurrently with OCM

The current Oncology Care Model (OCM) excludes cancer patients who receive radiation therapy alone, and for those who are undergoing both chemotherapy and radiation treatment, radiation therapy is only included for the duration of the OCM bundle. Because this model allows for greater inclusivity of cancer therapies, we predict it will run concurrently with OCM.

The challenge for CMS will be to determine how to attribute savings and allow cross-participation between this new oncology bundle and the current OCM. Ideally, providers will be able to participate in both models to cover more of their patients—this is the structure that makes the most sense, as it would benefit a larger group of providers and patients. In the event that providers are forced to choose between models, they would have to take a deep look at their historical data to determine which model will be most beneficial for the practice and their patients.

Prediction #2: Episode length will be shorter

One place where this new oncology model will likely differ is that the report to Congress suggested the program should have an episode length of 90 days. When CMS determines how long an episode should last for a given bundled payment model, the general criterion is that the episode should cover the period of the treatment intervention as well as a period of time where providers can monitor for complications related to the treatment. Approximately 99% of radiation treatment courses are completed in under 90 days, which is a big difference from the chemotherapy-based OCM episode, which has a six-month duration. That could be part of the reason why a radiation episode trigger wasn’t simply added to the current OCM.

Prediction #3: It will have some of the same issues as OCM

Some of the pitfalls that made OCM challenging will likely carry over to this new model because we expect some methodologies will be the same. Like OCM, the new bundle will use an evaluation and management visit approach for attributing episodes to practices and CMS will still have to come up with a cancer type assignment method, probably using plurality, as the agency is doing now in OCM. Hopefully CMS will be able to refine these areas somewhat going into the new model, but we still expect the program will hit some of the same snags.

Prediction #4: Hospital outpatient providers will be included

We predict that hospital outpatient-based practices will be included in the model, as they are in OCM. One of the interesting takeaways from the report to Congress is that this program’s initial focus was intended for radiation therapy delivered in non-facility settings. However, HHS found that about 62% of all radiation episodes for Medicare fee-for-service beneficiaries actually occur in the hospital outpatient department. So it wouldn’t make sense to have a freestanding radiation therapy center model only.

Prediction #5: The model may not have immediate two-sided risk

In a fairly aggressive move, CMS said this bundle will be mandatory. This is a little surprising for two reasons: First, there hasn’t been a radiation oncology bundle in Medicare yet, so this program will not be able to build off of the learned experiences of practices that have tested the program voluntarily. Second, OCM participants are more than two years into the program and most have still not figured out how to reduce their drug spending, which will likely be included in radiation oncology episodes.

Practices assigned to the program will be challenged to figure out where they can make meaningful practice transformation relatively quickly—because they could face early financial losses if there is immediate two-sided risk. The experience of recent radiation oncology bundles in the private sector could dissuade CMS from making this model mandatory, but we will have to wait and see how those play out. We predict that there will be industry pushback about the model being mandatory, but it remains to be seen if CMS will reverse its decision.

The DataGen team will closely follow the development of this new bundle to see how our predictions play out and to evaluate what can be modeled with the current and forthcoming program information.